Bitcoin Retreats Back Below $8,000 Level

20 May 2019, 18: 55
© Reuters.

Bitcoin slipped lower on Monday, retreating back below the $8,000 level after a late Sunday rally in which it rebounded more than 12% back towards its highest levels of the year.

At 07:04 AM ET (11:04 GMT) Bitcoin was down 1.8% to $7,882.5 on the index after rising around 12% from a low of $7,252.3 reached on Sunday.

Early last week prices of the digital currency hit 2019 highs of $8,323.9, nearly double where it was at the beginning of April.

After tumbling from all-time highs of close to $19,900 in December 2017 Bitcoin spent most of the first quarter of 2019 hovering below the $4,000 level before regaining momentum early last month.

Other major cryptocurrencies were also lower, with Ethereum off 2.7% at $249.87, XRP down 2.5% to 0.39673 and Litecoin at $91.548, a drop of 2.8%.

The total crypto market cap, which stands at about $247 billion and is often used to gauge demand, has more than tripled from its December trough.

Bloomberg reported Monday that Bitcoin may have gotten ahead of itself with its recent rally, surging beyond its “intrinsic value,” mirroring a similar move in 2017 which preceded a slump, citing a note written by strategists at JP Morgan on Friday.

“Over the past few days, the actual price has moved sharply over marginal cost,” the note said, according to Bloomberg. “This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging,” the note added, according to Bloomberg. “Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”